I agree with Haircuts that mixing it doesn't work unless you are an established and experienced salon. I do know many hair salons where it is mix and match. See
www.artizanbath.co.uk - an established business with a mixture of employed and self employed stylists.
It seems to work where the self employed stylists are secure with their client base and the employed stylists are still developing their skills or want to work fixed hours without worrying about running their own business - in other words they are happy to earn less per hour than the stylists in return for training/holiday pay/job security and income certainty.
It is all about finding the right people. I think it is very unlikely that you will find a ready to go employee, you will need to invest time (and that means money) into developing your employee. Be prepared for high turnover as not everyone makes the grade. Investing that time means that you will see fewer clients and your income will drop - you have to measure the profit you will make off your employee and balance that against your drop in business and consider whether it is worth it.
If you have self employed stylists who are struggling to build their business then you'll have trouble. Their business may fail and then you'll lose the incone they give you. But, if they are not ready for self employment, you can always consider making them an offer of employment.
My own feeling is that you cannot build a business by using self employed staff, all you can do is have your self employed chair business within nice premises that you don't have to pay for in full because the rent and associated overhead is "shared".
You might be able to find another salon owner in a similar position and pool resources, running one salon between you. Maybe you could look again at chair rental - but if you are also still building your client base that's going to be tricky.
Maybe you can have a business plan to rent a chair in the best salon in town taking your best clients with you. I knew a salon owner who did exactly that abs he was very happy with a commission split - said he was less stressed and financially better off - but he did get his loyal clients switching to other stylists if he wasn't in on a day that they wanted an appointment. There are always pros and cons.
Regarding your other question about the administration costs of managing staff, actually it's not that difficult at all, but it's not worth trying to do it all by yourself. In the UK you need to register with HMRC as an employer. Every month you send in a record of each employee's pay and deduction and pay the tax due. You also need to set up a pension plan. It costs money just to set up a Pension plan for employees because there's a lot of admin costs. Check your professional associations because there are often deals - I paid for Good Spa guide membership for 18 months which would have been a total waste of money if if I hadn't needed a pension plan.
You need an accountant who can run your payroll for a reasonable cost. Some accountants don't really do hospitality or shop based business so shop around. Every month you send your accountant a record of the hours, rate of pay and tips for each employee and they tell you how much to pay your employee and how much to pay the taxman and how much to pay into the pension plan and that's all you need to worry about, they do the rest.
The pension plan isn't a huge amount of money, especially if you have part-time staff. You can decide whether to pay the minimum amount legally required or be more generous. I pay the minimum because most of my staff don't benefit, so I give them more generous pay rather than a generous pension that most won't benefit from.
Your employee may decide that it's not worth joining. I have 3 part timers. One opted out of the Pension, so I pay nothing, one is in the pension but earns around £8k a year so most months I pay nothing and occasionally I pay about £25. Another staff member earns £12k a year and I pay around £50 a month for her. That will go up in April - she's already complaining about her pay because she doesn't understand the deductions. Hey ho,.
Holiday pay is a formula. For every hour an employee works they earn a few minutes of holiday pay. From memory, I think it works out about 12% of their hours. I just keep a spreadsheet of the hours they do each month and work out their accrued holiday entitlement. Your accountant can help with this but it pays to be reasonably on the ball. If a staff member leaves they get paid holiday pay if they haven't taken all the paid holiday they have accrued. You need to keep an eye on holiday so that you don't have staff wanting 3 weeks off in December, you want to encourage them to book and take holiday throughout the year - or plan for when they need time off like school holidays.
Hope that's helpful
